Labour donors are being put off giving money by concern that they will be accused of "sleaze," one of the party's principal fundraisers has reportedly said.

Lord Levy told the Daily Telegraph that it is becoming increasingly difficult to raise money for political parties following high profile rows over donations.

Lord Levy: Fundraising job is getting more difficult

Prime Minister Tony Blair's special envoy's comments came in a week in which Labour set up a new committee to vet donations.

It denied this move was sparked by controversy over a donation from soft pornography publisher Richard Desmond.

Lord Levy, who will be one of the committee members, told the paper: "When you have consistent innuendo, consistent interference day after day, week after week, it really is problematical," he said.

Stress

"It puts stress on to donors. They think 'my God, are they going to attack every single thing?"

He said his party fundraising job had become more difficult.

"People say I'm not giving to a political party in order to be crawled over in every single aspect when I know I haven't done anything wrong," he continued.

He insisted that he would be carrying on his role.

Carry on

"I am very proud of everything that I've done in fundraising and I'm sure I will be proud of everything I do in future," he told the paper.

But he said the first he had heard of the donation from Mr Desmond was when he had read about it in the press.

Prime Minister Tony Blair has already defended the decision to take the money.

But International Development Secretary
Clare Short told the BBC that Labour should not have accepted the donation.

The £100,000 gift from Mr Desmond, who owns magazines like Asian Babes and Horny Housewives as well as Express Newspapers, angered some Labour rank-and-file members.

Asked on BBC One's Question Time whether she thought Mr Desmond's donation should have been taken, she replied: "No. I hate porn, though if you look at the list of the 10 richest men in Britain, four or five made their money from porn.

But she said she was proud of some of the moves her party her made on political funding, such as introducing transparency and national limits.

The new six-member fundraising committee will oversee any gift of more than £5,000.

Labour chairman Charles Clarke said Labour has said it will decide whether to accept donations on a case by case basis.

The Conservatives have called for an independent commission to examine claims of corruption in government.